Redrow defies housing market woes

Housebuilder Redrow overcame the stagnant housing market, saying a fifteen per cent rise in selling prices had strongly boosted profits over the last year.

It also welcomed the government's controversial plans to relax requirements for affordable housing on new developments, saying this would have a positive effect on the delivery of new homes.

However, it said the NewBuy scheme, through which the government underwrites mortgages for new buyers, had not been such a success due to lenders not reducing rates to reflect the lower risk.

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Group revenue for the year increased 5.8% to £479m, while pre-tax profit was up 70% to £43m.

This was predominantly due to average selling prices rising from £164,800 to £189,900.

The firm added it had started the new year with reservations per outlet at a similar level to last year.

Total private reservations in the first 11 weeks of the new financial year were up 16% as a result of a year-on-year increase on outlets from 73 to 84.

Its strategy of focusing on its New Heritage Collection - homes built using 1920s and 1930s-inspired designs - paid off, with the brand now represented 67% of private turnover during the year.

This was up 35% the year before, with average selling prices of each house now £215,100, up 7% on the previous year.

This was down to "building larger and higher specified homes in better locations", it said.

Chairman Steve Morgan said that despite the encouraging start to the year and the recent government Housing and Growth announcement, the outlook for the industry remained challenging.

"Supply of mortgages, although slightly improved on last year, remains a significant constraint, as does public confidence due to the country's fragile economic state," he said.